Last year’s 3.5% mortgage rates are long gone — and experts say consumers who hold off buying or refinancing homes in hopes that sub-4% interest levels will return could miss out on today’s sub-5% rates, too.
“We think 3.5% rates are in the rearview mirror now,” says Mike Fratantoni, chief economist at the Mortgage Bankers Association. “It’s highly unlikely that we’re going to get back to those levels again.”
Benchmark U.S. mortgage rates hit a record-low of around 3.5% in late 2012 and early 2013 as the Federal Reserve’s Quantitative Easing III program helped push long-term interest rates into the cellar. Under QE3, the central bank had been buying $85 billion of Treasury bonds and mortgage-backed securities each month in a bid to drive rates on mortgages and other long-term debt down. Read More.
For housing, it was a tale of two halves in 2013. During the first half, unusually low supplies of homes and low rates spurred bidding wars, pushing prices up sharply. During the second half, the frenzy cooled amid a sudden spike in interest rates. While more markets are now reporting increases in inventory, the number of homes for sale remains quite low. Read More.
The average interest rate for the most popular kind of home loan, the 30-year fixed rate, fell to 4.22%, down from 4.32% a week earlier. Rates, as measured by a weekly Freddie Mac survey, have dropped from 4.57% since the Federal Reserve unexpectedly announced three weeks ago that it would not alter its stimulus program of buying Treasury bonds and mortgage-backed securities.
Most industry experts had thought the Fed would start to taper off those purchases, which bring liquidity to the mortgage markets and help keep rates low. Read More.
Savers are distraught — interest rates have never been this low. With less than 1% returns on the average savings account, your funds can only grow when you add money to the account yourself. Compound interest is irrelevant with these paltry savings returns. But let’s talk about how these low interest rates are a boon to home buyers!
Borrowers have a once-in-a-lifetime opportunity to buy a home with a 4% or lower rate on a 30-year mortgage. We refinanced our home last year and picked up a 15-year fixed mortgage with a 3.375% interest rate. We were part of a lucky group that bought a home in 2011 at the market trough, so our home price was relatively low — as is our mortgage payment. Read More.
The dodo bird.
The chances of the Chicago Cubs winning the World Series.
Mortgage rates below 4%.
All of the above are either extinct already or heading in that direction. (But we’d love to see the Cubs prove us wrong.)
For homebuyers, it’s the last item that sticks in their craw. By waiting until this summer to buy a home, fence-sitters may have added tens of thousands of dollars to their home price.
That’s because mortgage rates are moving upward, and at a fairly aggressive pace. Read More.
For years, we’ve been touting the buyer’s market concept to prospective clients, citing everything from high inventory levels to hard-to-pass-up deals on short sales and REOs. But here in the midst of the busy summer season, the tables appear to be turning, with increased home prices and reduced inventory now giving sellers their day in the sun.
With the seasons changing to once again benefit sellers, how do real estate professionals convince prospective buyers that it’s still a great time to buy? By citing some of the very same trends sellers are excited about, and some that might not even be on their radar. Read More.
Rates on 30-year, fixed-rate home loans spiked 0.53 percentage points to an average of 4.46% this week — the largest weekly increase in more than 26 years, mortgage giant Freddie Mac said Thursday.
The 30-year loan, which stood at 3.35% as recently as early May, is at its highest level since July 2011.
Rates for 15-year loans, popular with homeowners refinancing their mortgages, jumped 0.46 percentage points to 3.5%.
An extra percentage point will cost homebuyers with 30-year, fixed-rate mortgages $56 more a month for every $100,000 they borrow. Read More.
Do you hear talk of “historically low interest rates” and “best time to refinance in decades” but aren’t sure how to put it all into perspective?
Fortunately, we did a little research and summarized what you need to know about today’s mortgage rates, and more importantly, how these low rates affect refinancing or buying a home.
So read on for some facts on what to expect with rates in the future, what it means for today’s real estate market, and a look-back on where rates have been in the past. Read More.
The tax benefits of the mortgage interest deduction (MID) are primarily targeted to the middle class. According to 2012 Congressional estimates , 65.4 percent of the tax benefit is collected by households who have economic income of less than $200,000. In Kentucky, the study shows that between 94-95.4% of claimants have AGIs less than $200K, which puts the state in the highest category.
Of course, the claims for the MID are going to vary state-to-state given differences in house prices and other costs of living, household incomes, and tax items such as property taxes or state income/sales taxes, which in part determine whether a homeowner claims the standard deduction. Read More.
A proposal to revamp the mortgage interest deduction for taxpayers who are homeowners created more confusion for the mortgage industry this past week.
Policymakers on both sides have been toying with the idea of enacting changes to the mortgage interest deduction as a means to cut the nation’s growing federal deficit.
But Rep. Keith Ellison, D-Minn., threw another log into the fire this week by sponsoring a new bill that would limit the mortgage interest deduction to the first $500,000 of mortgage debt and then convert it to a 15% non-refundable tax credit. The change would hit homeowners with higher-priced mortgages the hardest. Read More.